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Sunday, July 28, 2013

Nikko STI ETF

As mentioned in my earlier post, I will be performing my own manual regular savings plan via my Stanchart brokerage account. The advantage of this platform lies in its low brokerage fees. There is no minimum brokerage fees imposed. You only need to pay a 0.2% brokerage fee. In addition to this, clearing fee and GST is being charged.

The plan is simple. I will buy one lot of Nikko STI ETF every month. The details of the transaction price and costs will be recorded here. We can then review this plan at a later point on the effectiveness of this manual regular savings plan.

I do know that this does not exactly mirror a typical regular savings plan where the amount is fixed. In a typical plan with fixed investment amount, you get to purchase more units with that fixed amount when prices are low. However, as I can only purchase in fixed lots via the brokerage account, I will buy 1 lot of the Nikko STI ETF per month. This will also mean that the amount to be invested monthly will vary month to month. However, the low commission outweighs the limitation where I can only purchase in full lots for now.

The details of the transactions will be tracked under the embedded Google spreadsheet below:

Hi Cloud,Yes, it takes some discipline to force yourself to buy on a fixed day.

You can make use of google calendar to set a recurring event for each month to remind yourself to top up your ETF.

You can also remind yourself that each 0.01 difference for a top up of 100 units only translates to $1 before commission charges. I personally find it a hassle to monitor and try to enter in another day to save that $1.

would like to understand more, i saw that you've sold 900 of your Nikko AM, and bought 1000 STI ETF on the same day. is there any strategy in it? is the 1000 from Nikko as well, or you've bought it elsewhere like SPDR? newbie here, thanks!

Hi Alison,The fees refer to the commission to broker. I was using stan chart trading account to perform the regular savings plan (rsp) previously as they were having no minimum commission. However, they are now imposing a minimum commission of $10 currently, which is why i have paused my monthly rsp.

If you are using the POSB invest saver, the commission is 1%. In your case, since you are fixing the amount invested, your monthly commission is $4. The remaining $396 will be used to purchase your monthly units.

I also recall they have the concept of rounding the units purchased.Example:if the purchase price is $2.94, With $396, you can purchase 134.69 units. Only 134 units is credited to your account. The remaining 0.69 units will be refunded to you (including the sales charge for that 0.69 units). Refund value = 0.69 * 2.94 * 1.01 = $2.04

Sorry for the late reply, I haven't been checking the blog much for the past few months.